Trump 50% Tariff Impact: Donald Trump has imposed 25% extra on India and made it 50%, so its effect will not only be seen on the companies related to American exports in various sectors but also on the employment of the employees working in them and the consumers using their products.
Donald Trump on Wednesday announced to increase the tariff on India to 50%. However, from Thursday, August 7, only the previously announced 25% US Tariff has been implemented on the country, while the extra 25% will be effective from August 27. Meanwhile, while on the one hand it is being said that it will have an impact on all sectors including the Indian economy, on the other hand, the common man of the country will also come under its purview. In simple words, the price of the 50% Trump Tariff will not only be paid by the companies associated with the sectors affected by it, but also the people working in these sectors and the consumers using its products.
Why did Trump impose extra tariff on India?
First of all, let’s talk about why the last US President has taken this action on India? So, let us tell you that while signing the executive documents related to 25 percent extra tariff, Donald Trump clearly said that despite all the instructions, India is adamant on buying Russian oil and this is an unusual and extraordinary threat to America. Along with this, he also said in the past that India is helping India financially in the war with Ukraine by buying crude oil worth billions of dollars from Russia.
These businesses will be directly affected. India has been a major trading partner of the US
till now and exports clothes, shoes, jewellery, diamonds, machinery and other goods in large quantities. If we talk about the textile and garment market, clothes worth about $5.9 billion are sent to the US every year. The export of jewellery and diamonds is about $10.22 billion (jointly). Apart from this, electronics worth $7.5 billion, pharma worth $13 billion and machinery worth $2.6 billion are exported annually. It is clear that after the implementation of the tariff, all these goods will become expensive in the US and the US will choose cheaper markets for these than India.
Employment will decrease in many sectors
Now if the goods reaching America from India are expensive, then America chooses to buy these goods from other countries with comparatively lower tariffs instead of India, then directly the Indian demand will decrease and this will also lead to a decrease in production. The simple funda is that if the demand for these is less in America, then the orders received by India will decrease. If this happens, then the employment of such workers will be in danger, who earn their livelihood from the companies and factories related to these goods.
To understand it as an example, according to the data of the Textile Ministry related to the textile and garment industry, the number of people working in this sector in the country is around 4.5 crores, who are directly or indirectly associated with manufacturing from Russia. Lakhs of artisans in the gems and jewellery industry, especially in cities like Surat, Jaipur, Kolkata, may be affected by this. A similar crisis is also increasing for people working in other related sectors.
Risk of inflation not just in the US but in India too
While there is a risk of increase in prices of goods exported from India to America due to the 50% Trump Tariff, some of its effects can also be seen in India in the form of inflation, which can directly affect the common consumers. Actually, a fall in Indian exports will reduce the income of the Indian companies associated with it, due to this, while they can take the step of retrenching the employees, they can also increase the prices of their products to compensate for the loss and these can become expensive.
Apart from this, the raw materials or technology coming from the US is also used in the manufacturing of the goods which are sent from India to America, so there is a possibility of their input cost increasing and the common consumers may have to bear its burden. A big crisis is visible on the MSME sector, which is already facing the challenges of cost and credit and 50 percent US tariff will make it difficult for it to export.
